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This chapter presents an investigation into the theory of labour market segmentation and income inequality in the Ghanaian mining sector. Mining activity especially gold mining has been a significant component of exports as well as employment and income earning in the three major mining regions of Ghana. While income growth is an economic benefit, the high incomes associated with the mining sector may lead to greater income inequality. This chapter provides an analysis of mining activity and income inequality in the Western, Eastern, and Ashanti regions of Ghana. The application of labour market segmentation and the Gini coefficient (a measure of inequality) for personal income are found to be significantly associated with the type and levels of mining employment. However, this observation is not linear as income inequality initially increases with mining activity before decreasing at medium to high levels of mining employment, thus following a Kuznets curve pattern. Segregating datasets for indigenous and expatriate staff reveals very different patterns of income inequality. It poignantly increases with indigenous and/or local community personnel relative to expatriate technical personnel at high levels of mining employment; income inequality is lower among the local community residents relative to nationals from other regions and/or from neighbouring countries. This means segmented labour markets (SLM) within the mining industry are likely to be a problem as they result in increased income inequality among locales relative to foreign expatriates.

The authors study the difference between multidimensional well-being inequality and income inequality and propose a method to decompose the difference between the Gini coefficients of income and equivalent income (EI), a multidimensional well-being measure that respects individual preferences towards what constitutes a good life. The authors propose a method to decompose the inequality difference into two parts: the vertical and reranking effects. The vertical effect arises from the correlation between income and non-income dimensions, and between income and preferences. The reranking effect arises from the fact that some persons occupy a different position in the EI distribution compared to the income distribution. The authors also propose a detailed decomposition method based on the Shapley value to decompose each of the two effects by non-income dimensions. The authors apply the decompositions using data for 27 countries, considering five non-income dimensions: unemployment, health, housing, crime and environment. The results show that inequality is much higher for EI that the reranking effect accounts for a large part of the inequality difference, and that health is the non-income dimension contributing most to both effects.

In large parts of the world, income inequality has been rising in recent decades. Other regions have experienced declining trends in income inequality. This raises the question of which mechanisms underlie contrasting observed trends in income inequality around the globe. To address this research question in an empirical analysis at the aggregate level, we examine a global sample of 73 countries between 1981 and 2010, studying a broad set of drivers to investigate their interaction and influence on income inequality. Within this broad approach, we are interested in the heterogeneity of income inequality determinants across world regions and along the income distribution. Our findings indicate the existence of a small set of systematic drivers across the global sample of countries. Declining labour income shares and increasing imports from high-income countries significantly contribute to increasing income inequality, while taxation and imports from low-income countries exert countervailing effects. Our study reveals the region-specific impacts of technological change, financial globalisation, domestic financial deepening and public social spending. Most importantly, we do not find systematic evidence of education’s equalising effect across high- and low-income countries. Our results are largely robust to changing the underlying sources of income Ginis, but looking at different segments of income distribution reveals heterogeneous effects.

This study aims to determine how taxes can be used to bridge income inequality gap in sub-Saharan Africa (SSA).

A panel data set of 36 SSA countries was analysed using generalised method of moments.

The results suggest that an increase in direct taxes relative to indirect taxes has a positive significant impact on income inequality. This is mostly due to the progressive nature of direct taxes as compared to indirect taxes.

This research contributes to the scant literature on how specific tax components affect income inequality, especially in developing countries.

Faced with contradictory outcomes in empirical studies on the relation between democracy and income inequality, this paper attempts to provide empirical relations between democracy and income inequality. In particular, the authors seek to find if any curvilinear relation exists as in the Kuznets hypothesis.

Given elusiveness in empirical relations, the authors will consider several specifications using different estimation methods such as ordinary least squares (OLS), panel data estimation and performing statistical tests to determine the best specification for the relation between income inequality and democracy. Once the authors choose the specification, then the authors will apply this specification to the different groups of data to find any meaningful implications.

Using the unbalanced panel of 136 countries spanning from 1980 to 2018, the authors found an inverse U-shaped relation, called a political Kuznets curve – income inequality increases first and then decreases later as more democracy is achieved. By quantifying the curve, the authors find that the direct impact of democracy on income inequality is small and that the incremental impact of democracy on income inequality is smaller in a semi-democracy while relatively larger in a full democracy and autocracy.

From the study’s findings, the following policy implications can be considered. First, any change in income inequality caused by democratization should not be concerning as the impact of democracy on income inequality is measured to be very small. Second, the largest factor reducing income inequality is real GDP per capita. Third, the authors find that an impact of government expenditure on income inequality is also inversely U-shaped.

This paper aims to investigate the effects of financial access, financial depth, financial efficiency and financial stability pillars on income inequality and poverty among a panel of sub-Saharan African (SSA) countries.

This paper captures cross-sectional dependence among the income groups through the dynamic common correlated effect approach for a data set of 28 selected SSA countries from 2000 to 2017.

This study reveals that the financial development pillars exert positive and significant impacts on income inequality across the income groups. The results show that the effects of the financial development metrics on poverty are different across the income groups. The results also indicate that the pillars improve poverty reduction for low- and lower-middle-income countries. However, there is a minimal effect on poverty reduction in upper-middle-income countries. The differences among these income categories suggest the need for policymakers to account for income levels when prescribing policies that could engender financial development and poverty reduction in the region.

This paper examines the effects of financial development on both income inequality and poverty by using the newly developed World Bank financial development strategic metrics. It captures cross-sectional dependence in the full sample of selected SSA countries and their income categories.

The study aims to use individuals using the internet and fixed broadband subscriptions as a proxy for digitalization to empirically assess the effects of Foreign Direct Investment (FDI), digitalization and their interaction on income inequality in developed and developing countries from 2002 to 2019.

The paper used the system general method of moments estimators for 30 developed and 35 developing countries.

FDI increases income inequality in developed countries but decreases it in developing countries, digitalization reduces income inequality in both groups and interaction term narrows income inequality in developed countries but widens it in developing countries.

The paper is the first to introduce digitalization into the FDI – income inequality relationship. Furthermore, it provides empirical evidence to show the difference in the role of digitalization in this relationship between developed and developing countries.

Information and communication technology (ICT) has the potential to address and reduce income inequality. However, since 1980, income inequality in the United States has caused concerns for researchers, policymakers and the public. Entrepreneurs and managers can take advantage of information technologies, while those in the middle and the bottom see fewer benefits. Meanwhile, countries such as Iceland are more capable of using ICT infrastructure to reduce income inequality, which contributes to the well-being of its citizens. This research study explores the relationship between infrastructure diffusion and income inequality through Rogers’s diffusion of innovations theory.

To answer the research questions, the author assessed the data through a series of regression analyses using SPSS. The authors used Power BI software to chart the relationships between ICT infrastructure diffusion and income inequality by country and in the United States by state and region.

The results show diffusion of innovations theory’s tenets do not necessarily hold, because a significant negative relationship exists between infrastructure diffusion and income inequality, especially in countries with emerging economies. In the United States, this relationship significantly differs by region.

This research contributes to research by expanding economic and sociology work to the IS domain, while providing conflicting evidence for diffusion of innovations theory. The research also provides suggestions for practice, such as more focused ICT infrastructure investments and regulations.

Tourism has grown to be one of the world's largest and fastest-growing economic industries. Tourism development is viewed as a tool to improve income distribution as it allows people at the bottom of the pyramid to get involved in the industry. This study aims to examine the impact of tourism on income inequality in the top income equality countries.

The paper employs fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares techniques to investigate the dynamic impact of tourism on income inequality in the world's most income equality countries, from 2001 to 2016.

The result shows that tourism is one of the major drivers of income equality. Thus, tourism can be used to reduce a country's income disparity.

As a result, policymakers should support the tourism industry to reduce income disparity and enhance income distribution.

Given the conflicting findings in the literature, this study reexamines this link and attempts to backwardly assess if the top equal-income countries in the world are heavily dependent on tourism.

The purpose of this paper is to apply a poverty level decomposition approach to decompose the poverty by income sources and investigate the impact of government transfers on income inequality and rural poverty.

This paper uses the decomposition method of inequality and the decomposition method of poverty level by resource endowments to decompose the overall inequality and the overall poverty by income sources.

It is found that unequal income distribution rather than income endowments is mainly responsible for the existence of poverty. Government transfers and relief income, aiming at the poor, help alleviate inequality and poverty, but are not targeting the poorest. Unequal distribution of production subsidies actually lead to higher poverty incidence.

This paper has revealed that the poverty issue cannot be resolved with economic development alone if the issues including the inequality in income distribution are not solved. It is important to make government transfers/subsidies pro-poor.

A poverty level decomposition approach is first used to decompose the poverty by income sources in China.